CPH: New strategy generating international growth

Copenhagen Airports A/S (CPH) generated 3.1% growth in passenger numbers in the first nine months of 2012. This improvement was primarily driven by international traffic, confirming the success of CPH’s strategy of strengthening Copenhagen Airport’s position as the northern European transport hub. In addition, revenue from the shopping centre continued to grow thanks to a strongly improved shop and brand mix. CPH retains its full-year forecast. 

2012-10-31 — /travelprnews.com/ — The historically busy summer season helped boost passenger numbers at Copenhagen Airport by 3.1% to 17.8 million in the first nine months of the year. Revenue increased by 5.5%, and profit before tax excluding one-off items was up by 13.0% to DKK 925.3 million, driven by higher passenger numbers, growing revenues from the shopping centre and lower financial costs.

“We are firmly committed to strengthening our position as the northern European transport hub, making significant investments in expanding Copenhagen Airport and developing our international traffic. These investments have contributed to the 12.9% increase in intercontinental traffic in the first nine months of the year, primarily driven by the new SAS service to Shanghai and increased capacity on the services to Middle East destinations Dubai, Doha and Bahrain,” said Thomas Woldbye, CEO of Copenhagen Airports A/S.

Overall, the number of international passengers was up by 5.8% year to date, and the approximately 900,000 additional international passengers show that CPH’s World Class Hub strategy launched in March was the right move.
In the course of the year, Copenhagen Airport has started up a major project to increase check-in capacity and flow in Terminal 2 and the Arcade between Terminals 2 and 3, an extension of Pier C, which is used for intercontinental traffic, and extending the capacity of the baggage area to 30 million passengers per year.

More transfer passengers
Transfer traffic also continued to grow, with 8.5% more transfer passengers travelling through Copenhagen Airport in the first nine months of the year.

Domestic traffic was down 20.3% year-on-year. However, domestic traffic began to stabilise after the bankruptcy of Cimber Sterling in May as the effect of the new domestic routes opened by SAS, Norwegian and DAT began to show.

Growth at the shopping centre
Copenhagen Airport’s shopping centre continued the positive trend of the first half year, generating a 12.3% increase in revenue thanks to a number of new shops, restaurants and bars that have opened in the course of the year as well as the shopping centre being fully let. Moreover, the spend per passenger also increased.

“Having an attractive shopping centre is a cornerstone of the business of operating a modern airport, and a large proportion of Copenhagen Airport’s total revenue currently comes from our shopping centre. These earnings allow us to continue to invest heavily in the expansion and development of the airport.

Newcastle divested
After the end of Q3, CPH has sold its 49.0% ownership interest in NIAL Group Ltd., the parent company of Newcastle International Airport. A part of CPH’s strategy since 2007 was to focus its activities on the development and operation of the airport in Copenhagen. This is also described in the World Class Hub strategy, presented on 1 March 2012. The divestment of NIAL completes the strategy.

The divestment of NIAL will be recognised the financial statements for Q4 2012.

Based on the expected traffic programme for 2012, the total number of passengers is expected to increase. Traffic, however, could be adversely impacted by the continuing economic uncertainty in the Eurozone and any closure of routes due to airline reductions. The forecast is retained despite airline bankruptcies during the year.

The increase in passenger numbers is expected to have a positive impact on total revenue. Operating costs are expected to be higher than in 2011, primarily due to the forecast passenger growth, cost inflation, and increased depreciation charges as a result of the higher level of investment with a focus on continuing growth. Overall, profit before tax is expected to be higher than in 2011, when excluding one-off items, including the gain from the divestment of NIAL.

Under the charges agreement, CPH must invest an average of DKK 500 million annually, but CPH expects to invest significantly more than this in 2012. CPH will also be investing in other commercial projects for the benefit of airlines and passengers.